MAKE-OR-BREAK FOR GREECE

European stock markets finished close to their highest levels of the day after a European Central Bank (ECB) rate cut boosted buying after midday. However, all eyes were on Greece's Prime Minister George Papandreou today going into a make-or-break confidence vote tomorrow.

The Cac in Paris was 85 points higher at 3,195, the Ibex in Madrid rose 8,713, while the Dax in Frankfurt was up 168 at 6,133.

MAKE-OR-BREAK FOR GREECE

German chancellor Angela Merkel and French president Nicolas Sarkozy told Papandreou that Greece would not receive the next €8bn tranche of aid unless the referendum on the bail-out is passed. Angela Merkel told reporters last night before today's summit: "We would rather achieve a stabilisation of the euro with Greece than without Greece, but this goal of stabilizing the euro is more important."

During today's session, rumours appeared every few minutes in the press as to the employment status of Papandreou. Just as many questions were of asked of what had become of his referendum, which was effectively on Greece's membership of the eurozone, whether Papandreou liked to admit it or not.

However, Papandreou has admitted that he would be "glad...if we don't go to a referendum", but said that it would only be scrapped if "opposition comes to the table to back the bailout". He faces a vote of confidence motion in the Greek parliament tomorrow, and there is a good chance he will lose it.

Another MP for the ruling Greek PASOK party has resigned this morning, while a second one has declared that she will vote against the confidence motion, The Wall Street Journal reports. That seems to indicate that the Papandreou, has effectively lost his sure majority within the Parliament in Athens.

SURPRISE MOVE BY ECB

As if that excitement wasn't enough, ECB new boy Mario Draghi announced that the Central Bank was cutting interest rates by 0.25% to 1.25%. While most had expected a cut next month, virtually no one saw this coming at Draghi's first interest rate decision as ECB President.

"We had expected a 50bp rate cut at the next ECB policy meeting, on December 8th, and in our view there is still clearly significant potential for a further 25bp rate cut at that event," said Julian Callow at Barclays Capital.

The ongoing crisis in Greece has spurred uncertainty in the markets, with risk-off sentiment being seen as Italian 10-year yields hit record highs. "Fear of contagion is still rife within the Eurozone, and unless governments such as Italy’s can get their books in order, Greece will defiantly not be the only tragedy of this crisis," said trade Simon Furlong from SpreadEx.